Kenya Prepares to Legalize Cryptocurrencies: Report

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Tanzeel Akhtar

Journalist

Tanzeel Akhtar

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Tanzeel Akhtar is a seasoned journalist who has been reporting on cryptocurrency and blockchain technology since 2015. Her work has appeared in leading publications including The Wall Street Journal,...

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January 10, 2025

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Kenya is set to introduce legislation to legalize cryptocurrencies, marking a policy shift, according to a local report quoting Treasury Cabinet Secretary John Mbadi.

Speaking on Friday, Mbadi outlined the government’s plans to create a regulatory framework for cryptocurrencies, an industry that has operated in the shadows despite an official ban.

“Kenya’s financial sector is a beacon of innovation and growth in Africa,” Mbadi stated. “The emergence and growth of Virtual Assets and Virtual Asset Service Providers have given rise to innovations in the local and international financial system with dynamic opportunities and challenges.”

While recognizing the risks associated with cryptocurrencies, such as money laundering, terrorism financing, and fraud, Mbadi emphasized that a legal framework would allow Kenya see the benefits of the crypto market while mitigating its dangers.

“The Government of Kenya is committed to creating the necessary legal and regulatory framework in order to leverage opportunities presented by VAs and VASPs while managing the resultant risks,” he added.

IMF Urges Kenya to Establish Clear Crypto Regulations

The proposed policy seeks to establish a fair and competitive crypto market and improve financial literacy across the country.

This initiative aligns with recent calls from the International Monetary Fund (IMF), which urged Kenya to develop regulations to address consumer protection and financial crime concerns related to cryptocurrencies.

In a technical assistance report released on January 8, the IMF outlined shortcomings in Kenya’s current regulatory approach to crypto assets.

Outdated frameworks have struggled to address the rise in crypto-related scams and illicit activities, leaving consumers vulnerable to financial risks.

With Kenya joining the growing list of African nations embracing cryptocurrency, this regulatory shift could position the country as a regional hub for blockchain innovation while addressing systemic risks.